Forest Investment Program

In Mexico, FIP $18 million is supporting a project to build capacity and develop exclusive lines of financing for community forestry enterprises and ejidos. Photo by Talli Nauman/TRF

The $785 million Forest Investment Program (FIP), a funding window of the $8.1 billion Climate Investment Funds (CIF), supports developing countries’ efforts to reduce emissions from deforestation and forest degradation and promote sustainable forest management and enhancement of forest carbon stocks (REDD+).  The FIP is active in 8 pilot countries.

The FIP has enhanced the importance of the REDD+ agenda in these countries by linking relevant mitigation and adaptation initiatives together and providing additional motivation for comprehensive engagement and dialogue on the issue across multiple stakeholder groups. This intentionally deliberative investment planning phase has catalyzed a relatively swift project approval rate, making the FIP the fastest moving portfolio of the CIF.

• FIP $501 million is allocated to 38 projects and programs, expecting co-financing of $1 billion from other sources.
• FIP $208 million (42% of the FIP allocations) is approved and under implementation for 12 projects with expected co-financing of $742 million.
• Unique to the FIP is the $50 million Dedicated Grant Mechanism for Indigenous Peoples and Local Communities (DGM), the largest global REDD+ initiative created solely for and by indigenous peoples and local communities.

FIP and REDD+

Channeled through the multilateral development banks (MDBs) as grants and near-zero interest credits, FIP financing addresses the many dimensions on REDD+:

• Promoting forest mitigation efforts, including protection of forest ecosystem services
• Providing support outside the forest sector to reduce pressure on forests
• Helping countries strengthen institutional capacity, forest governance, and forest-related knowledge
• Mainstreaming climate resilience considerations and contribute to biodiversity conservation, protection of the rights of indigenous peoples and local communities, and poverty reduction through rural livelihoods enhancements 

The FIP is investing in the on-the-ground action needed to advance REDD+ in FIP pilot countries. Described as the “missing middle,” FIP primarily focuses on REDD+ implementation activities (Phase 2), providing a crucial pull to incentivize REDD+ readiness activities (Phase 1) and exerting a push to develop needed capacity and experience for countries to progress to results-based payments (Phase 3).

The FIP complements other REDD+ financing mechanisms, including Forest Carbon Partnership Facility (FCPF), Global Environment Facility (GEF), UN Collaborative Programme on Reducing Emissions from Deforestation and Forest Degradation in Developing Countries (UN-REDD Programme)

FIP and the Private Sector

To extend the FIP’s reach beyond national investment plans and encourage more private sector participation, financing was set aside to be awarded on a competitive basis for private sector projects advancing the goals of the FIP within FIP pilot countries. A 2013 call for proposals in FIP pilot countries resulted in four projects endorsements totaling $31.3 million in Brazil, Ghana, and Mexico.

Measuring Results 

For FIP country and program evaluation, performance data and progress reports, view the FIP Monitoring and Reporting section.   

Multilateral Development Bank Focal Points